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Fate of Illinois at Stake During Pivotal Election Year

The Illinois state legislature convened two weeks ago, and legislators have plenty of hard work ahead of them. Quite simply: Illinois’ economic future is at stake during the 2014 session. For the past few years, residents of the Prairie State have seen state and local tax rates continue to increase – and spending grow to new, fiscally irresponsible heights. Whether it is a “temporary” tax hike on individual income or a boost in the price of a pack of cigarettes, taxpayers are feeling the burden of these additional costs in all aspects of their daily lives. According to the Tax Foundation, Illinois’ taxpayers pay $4,512 per capita in state and local taxes and have an average tax burden of 10.2 percent –a problem Governor Quinn failed to provide a solution for during his State of the State speech on January 29.

With that in mind, this election year provides Illinoisans the best opportunity to effectively take back their state from the misguided legislation of tax-and-spend politicians.

In 2011, Governor Quinn signed into law “temporary” tax hikes on individual income (3 percent to 5 percent) and corporate income (7.3 percent to 9.5 percent). With these rates set to expire and scheduled to drop to 3.75 percent and 7.75 percent, respectively, in 2015, Democrats are now seeking permanent extensions in hopes of staving off Illinois’ ever-growing deficit. When it comes to the subject of temporary tax hikes, Grover Norquist, president of Americans for Tax Reform, famously said, “History has proven that ‘temporary’ tax hikes are about as prevalent in nature as unicorns.” Illinois constituents should force Springfield to keep its word, thus easing the total tax burden on taxpayers across the state.

Rather than seeking increased and new revenue on the backs of taxpayers to fund costly government programs in the state, Illinois lawmakers should reduce flagrant and unchecked spending. Take, for instance, the recent cigarette tax hike in 2012. The state estimated the tax increase would generate over $350 million in new revenue. In reality, the hike resulted in only $260 million in revenue – well below state projections. This means either A) the number of smokers in the state of Illinois drastically dropped, or B) Illinoisans bought their cigarettes across state lines.

Option B is, of course, the most likely, and with these purchases comes new revenue for border states such as Indiana and Missouri – at Illinois’ expense.

On the spending side of the coin, unchecked pension liabilities continue to ravage the state budget with fewer funds left for transportation needs, public works projects, or any other necessity legislators may need for Illinois without higher or new taxes to cover the cost. On the local and state level, salaries of government employees continue to increase. Teachers in Chicago, for example, received a 7-percent pay increase over a 3-year period from Mayor Rahm Emanuel to end the strike in 2012 – even though student achievement, which accounts for only 30 percent of teacher evaluations, continues to falter in the Chicago school system.

With unfunded pension liabilities and reckless government spending driving the state further into the red, Illinois is quickly heading the way of California. Rather than permanently extending these tax hikes and placing undue burdens on the working men and women of Illinois, the governor and state legislators need to drastically reduce government spending in order to begin to resolve the challenges plaguing the Land of Lincoln.

Springfield already drove Office Depot, along with 2,000 jobs, out of the state due to ever-increasing taxes and operating costs. If this trend continues, more businesses – which already contribute nearly 45 percent of the state’s tax revenue – will be leaving for more tax-friendly, fiscally responsible states. Perhaps lawmakers should listen to their constituents’ desire to have a lower tax burden. If not, then it’s time for the taxpayers of Illinois to demonstrate their displeasure with the status quo when they cast their votes in November.